Posted by Matthew on August 21, 2007 at 12:18:22:
John-
I am an investor in Boston and Worcester, Ma. You are correct that most properties will negative cash flow, thats of course at 100%. Are you considering anything for a down payment? If not your not going to get anywhere. Best Non Owner financing is at 90% with 10% down. The true mortgage rate is around 8.5%-10.5% on a loan these days.
Can someone look over these numbers for me? - Posted by john
Posted by john on August 20, 2007 at 16:10:08:
I found a 4-unit (4X1br) that is in decent shape just a few doors down from my 3 -unit (3X2br) that I own now. Sold for $535,000 about a year ago. Was asking $439k but dropped to $409k. I would offer $360k. It has been bank owned for about 5 months. The note is $434k. It has a lot going for it, big lot, lots of offstreet parking, big decks, good sized sunny apartments with crown moulding and HW floors. Needs some paint and new linoleum in some rooms. New utilities are all seperate. Rents should be $800-900/mo. Taxes $4200 but being reassessed this year and should go down. I’m guessing insurance will be
Re: Can someone look over these numbers for me? - Posted by Judah hardmoney Hoover
Posted by Judah hardmoney Hoover on August 20, 2007 at 17:30:11:
The first thing you need to do is get a good mortgage broker. I am not sure this deal even has a cash flow. Am I missing something???
$3200/month in rent
-$525 tax/ins
-$2500 mortgage (360k@7.5%, this is a SUPER best case for the financing)
That leaves you $175/month and you havenâ??t even saved for a rainy day, paid yourself to manage the property or paid utilities, I cant remember the last time I saw a multi unit that did not have some common usage for electric or heat.
Only look at comps in the past 6 months within .25 to .5 miles, some would say even closer. Make your money when you buy not by appreciation.
I donâ??t mean to kill your deal but I am not seeing it, tell me where I am wrong.
Judah Hardmoney Hoover
JudahH@SFCloan.com
Re: Can someone look over these numbers for me? - Posted by john
Posted by john on August 20, 2007 at 18:00:07:
Thanks for the response. I’m under the impression that most 2-4 unit properties around here (Boston area) will not cash flow from the get-go. I could be wrong and certainly there are far more knowledgable people here than me. I have looked at about 10-15 3 families and most of them negative cash flow. The rental market here has not kept pace with the housing market. That seems to be reversing now. Of course with a big downpayment (20%) they will cash flow. Most of the people I have spoken with around here seem to feel that there is not much chance for a lot of cash flow from the start. Maybe I am talking to the wrong people. Anyone investing in this area that can weigh in?